Trouble in the markets?
Numbers up again, but for how long?

Seems that the gains that oil prices made over the last couple of days has been pared by the realities seeping into the markets.

What we saw go up, and with consumer prices going up this week, may be coming down soon.

All the data now coming in shows that oil prices could be facing their biggest challenge to stay up in price yet. A drop in crude oil imports through China along with a weaker than expected jobs report may soon play into the markets as demand for crude oil may be slipping.

While oil prices for West Texas Intermediate rose on average from last week by close on $4 US a barrel, oil has begun a slide that, for some, hopefully will continue into the next session and into refined commodities.

Just not this week...

Here's what I have for this regulatory session so far, keeping in mind that I only have five days of data on gasoline prices. The rest of the numbers cover six days of market trading:

• Heating and stove oils show an added 3.6 cents per litre.
• Diesel shows an increase of 4.2 cents a litre, and...
• Gasoline shows an added 3.4 cents a litre.

Oh well...

This change will put us halfway through July with the price still below the $1.40 a litre the numbers showed as the average for the summer for the St. John's area from myself, and well below the $1.50 a litre expected by all the other analysts and speculators out there.

Remember that word "volatility" is still a factor out there...

I'll be back tomorrow night with the final numbers on what to expect for Thursday morning.

Regards,

George

Resource give-aways continue...
Welcome aboard Alberta!

See?

And you thought that the 1985 signing of the Atlantic Accord was bad, and that it was a bad thing for Newfoundlanders and Labradorians to be upset over our resources sailing away!

There's a pipeline construction project about to start in Alberta that will see almost 900,000 barrels of crude oil processed in Texas rather than inside Alberta. In context, making our offshore oil production a mere pittance against what Alberta has to export!

It's called the Keystone Project...

Canadians should be going off their heads,but there's hardly a whimper, except from the likes of some unions who are warning about the deal that would ship tons of bitumen to Texas for refining. It's just another classic example of crude oil resources going south of the border to power Uncle Sam's economy, rather than keep our own economy powered with secondary processing jobs.

The sale of this country's resources continues, and as reguards to resource giveaways, we at "gas and oil" would like to welcome aboard Alberta as being partly responsible for adding to Canada's energy shortages in the future!

On that "sour" note, I'll be in touch tomorrow evening on the trend in price changes for this coming Thursday!

Regards,

George

Oil keeps rising, so does the price of gas
Consumers to get dinged at the pumps again

Media release

Conception Bay South, NL, May 7, 2008- Consumers in Newfoundland and Labrador will notice a jump at the pumps again tonight, that’s according to George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

“Consumers in Newfoundland and Labrador can expect to see another increase at the pumps tonight as numbers are showing an allowable two cents a litre over twelve days of data recorded. While stove oils show a very slight decline, the number is too low to note any real change in pricing and that may be an indicator that there will be a slight adjustment in heating and diesel oil pricing,” said Murphy.

Reasons why prices will go up
“Continued supply disruptions in Nigeria and the promise of Kurdish attacks against Northern Iraq oil infrastructure as revenge against the United States for sharing satellite intelligence with Turkey, drops in production in Russia and Mexico and heavy investment in related fuel commodities continues to dictate what consumers will pay at the pumps. A run-up in oil driven mainly by speculators continues to put upward pressure on oil pricing as a result of investors hedging against the drop in the U.S dollar.

New investment laws needed
“There’s a fine line between investment in the actualities of the oil markets and the reality of the markets that has been costing people so much. Using important consumer products that have faced no appreciable increase in demand has become the norm in the markets as of late. The simple laws of supply and demand have been thrown to the wind. Food costs have gone up merely on speculation that they will be of more interest to companies for the manufacture of bio-fuels rather than for the basics of human consumption and this has already caused problems in other countries. The high cost of diesel has resulted in other added costs to foodstuffs. It is only a matter of time before we see more food costs passed to the consumer. What investors are doing instead of speculating on the actualities of the markets is, in fact, speculating on starvation. They’re betting that food as a fuel is more important than food for consumption.


Time for a new National Energy Program to protect Canadians?
“The Government of Canada should certainly be looking at the possibility of protecting the Canadian consumer from outside sources of pricing influence knowing that we are self-reliant in our resources of oil. We should, as a country, institute a new National Energy Policy that protects Canadian consumers and industries like the fishery from outside influences like OPEC. If they can sell gasoline in downtown Tehran for 11 cents a US gallon, then we can sell our own refined product to Canadians for a Canadian price.

Heating oil users will face problems next winter
“I have not noted any appreciable drop in heating oil prices and that remains a worry as consumers usually start to see a retreat in distillate pricing during the spring. That trend has yet to happen and the promise is there to see higher than normal pricing again next winter. Prices need to see a retreat of almost 50 cents a litre in the coming months to return to some form of ‘normalcy’ in their heating expenses. A lot of people have to jump in here in order to avoid any problems for consumers and to put heating/stove oil pricing back to where they were in 2005.

Food banks will need help
“Heating oil users face a dilemma this coming winter if pricing does not return to more affordable levels. They will again be faced with the challenge of choosing between food and fuel this winter. Food banks can expect to see another increase in traffic if heating oil pricing fails to drop. Numbers here indicate the fact that consumers will face that tough choice as all models show heating/stove oil pricing will be up again this coming winter. Although it is very early to predict the price range, it looks as though consumers can expect to pay close to that $1.00 a litre again if numbers for heating/stove oils fail to retreat.”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
gasprices@hotmail.com

The ramifications of $100 a barrel oil
Consumers and industry will take a huge hit

News release

St. John’s, NL, September 19, 2007 – Rising oil prices will have detrimental effects on consumers and industry if oil prices hit the $100 per barrel mark by the New Year, that’s according to George Murphy of the Consumer Group for Fair Gas prices.

“Already, I am noticing that heating oil pricing is 10 cents a litre higher than the same point last year and that could prove to be very costly to consumers this coming winter as pricing has continued to rise along with the price of a barrel of oil,” said Murphy. “If you haven’t heard of unaffordable heating oil pricing, it’s because we haven’t gotten into the winter heating season quite yet.”

“Spot pricing for all distillate fuels is up considerably and that could lead to higher transportation costs as we get further into the distillate season. We could become witness to increases in fuel costs to move goods and services and that means inflationary pricing to the average consumer. Market analysts are already predicting only a slight retreat in oil prices before we see $100 a barrel for oil. The oil industry will try to recoup those costs and that will mean higher pricing for all refined products including heating, stove, diesel and gasoline pricing.

“The only thing that is preventing a very sharp increase in pricing instead of the moderate increases we have been experiencing is the rise of the Canadian dollar against its US counterpart. If this were two years ago, we’d be looking at an added 25 cents onto these prices as they stand now. The ramifications of any slip in the Canadian dollar now are stark and staring at the consumer and industry too. A dollar a litre for heating fuel would be disastrous to the consumer out there.

“Government, on both levels, is going to have to look at a complete removal of the tax on heat as a measure to keep consumers warm this winter. I don’t think it’s good enough to see rebate programs put in place to take care of just a few people. We all are going to have to pick up the rising costs for higher oil so, why not make it across the board and country-wide?. Rising oil pricing may be good for the government treasury but when do we get our share?

“The fact that there may be consumers out there who will not be able to afford heating fuels this winter is fast becoming both a growing health concern and a financial burden to a lot of families. Industry, particularly the transportation sectors and the Newfoundland and Labrador fishery, will have to be able to adapt and deal with rising fuel costs as well as high dollar value and transportation issues. The rising costs of oil to electrical companies that generate electricity by burning oil will also have to recoup costs from the consumer as well. What are the side-effects of that on the people of Labrador?

“It’s still a little early to predict where this winters heating/stove oil season will be going this year but, so far, it does not look good. With pricing for heating oils already ten cents a litre higher than the same time last year and the promise of a rising oil price, the ramifications are obvious. In spite of recent builds in distillate inventories ahead of refinery maintenance season, there is a distinct possibility this time around that we could see pricing well over last years numbers. The only thing that could stop what will happen is recession and, I’m thinking we’re close to the edge of that now.”

-30-

For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

gasprices@hotmail.com

The promise of increases to come...

Nigeria disruptions to supply, inventory losses, refinery problems...

We hear every day now, that pricing will rise further to consumers and that there is no relief in sight. What we do know is that refiners have been making a fortune and so have their Big Oil cousins. All said, the promise is there for pricing to hit record levels, especially after todays news.

The situation in Nigeria is a restless one. When oil was discovered there some years back, it brought with it the promise of a better life for those who didn't know the wealth to be gleaned from the underground resource. All that was heard was that "things wuld get a whole lot better".

They haven't...

Especially in the resource rich Niger delta where most of the resource is located.

The people there live in squalor and they have yet to see any tangible benefits like money for education, roads and infrastructure.

Where is Big Oil in this?

Does Big Oil have a responsibility to look after a people when it goes for their resources, especially when a government like that of Nigeria fails them? Should Big Oil continue to rape a resource knowing that the harvest of which can bring the problems that have come to be realised?

What of the next country?

Next time you go to the pumps, consider this:

If I have to pay high prices for a product that is succeptible to the pressures of a geo-political situation in Africa, should I have to see pump pricing that DEPENDS on a resource from that region? Should I be worried that someone is smacking a hole in a pipeline to get part of a product that I can take for granted at the pumps of Young Street in Toronto or Kenmount Road in St. John's?

Should geo-political problems elsewhere be the determining factor in the resons why Canada should have its own sources of supply rather than be dependent on someone else's resource, namely Nigeria's?

Toady, Shell announced that it has lost another 170k barrels a day in crude oil production from that country and so far, the markets are pointing up on the news. The promise is there at this time, to see another couple of cents on the pump price by tomorrow morning, all for the simple sake that the citizens of the Niger Delta are looking for their piece of the oil-rich pie: for fairness and fair treatment.

Perhaps it is time we look at ourselves and a secure supply for Canada, not just for our sake but for the sake of a people who are thrown to the wayside in the vain hope that Big Oil is looking merely at profits instead of ensuring the people of the country get their fair share rather than letting despots who rule the roost gather the benefits derived.

Perhaps Big Oil should take part responsibility in getting the people of that country looked after before they smack a drill-bit in the ground. Maybe they shouldn't pay directly to governments who aren't going to look after the people for them. Ahhhhh, but that's the way governance works in the world, isn't it?

Perhaps it should be the case where Big Oil should just back away until people's rights are recognised.


Regards,

George